Method and apparatus for mapping sources and uses of consumer funds

ABSTRACT

A bill-paying system includes a customer deposit account which receives periodic payroll deposits of an individual or a couple. A bill-paying service enrolls the individual or couple for a fee, and is authorized to transfer money from the deposit account to the accounts of various creditors. An originating depository financial institution, such as a bank, handles the transfers of money, and such transfers are preferably done electronically. The automated clearing house (ACH) network supports such electronic money transfers. The various bills and debts of the individual or couple come due at times that are asynchronous to their income structure. The bill-paying service is authorized to debit the deposit account for more than the basic minimums due the creditors each month. Such excess is used to accelerate the repayment of various loans and debts according to what particular application at that time will have the greatest long-term beneficial effect.

CROSS-REFERENCES TO RELATED APPLICATIONS

This application is a divisional of commonly assigned, co-pending U.S.patent application Ser. No. 10/168,871, filed Nov. 13, 2002, entitled“Method And Apparatus For Mapping Sources And Uses Of Consumer Funds,”which is a national phase of International Patent Application No.PCT/US00/33750, filed Dec. 13, 2000, entitled “Method And Apparatus ForMapping Sources And Uses Of Consumer Funds,” which claims the benefit ofU.S. Provisional Patent Application No. 60/173,691, filed Dec. 29, 1999,entitled “Debt Repayment Acceleration System.”

BACKGROUND OF THE INVENTION

1. Technical Field

The present invention relates to plans for repaying mortgage loans andother installment debts on accelerated schedules, and more particularlyto computer-implemented systems that organize, forward, and report theapplication of many individual consumer payments to their correspondinglenders and creditors with the objective of saving money over a standardinstallment repayment history.

2. Description of the Prior Art

In general, the unpaid principle of a mortgage or other type of loan iswhat earns interest for a lender at the agreed rate. Each monthlymortgage installment payment is usually applied first against theinterest earned, and then any balance goes towards reducing theoutstanding unpaid principle. The actual amount that goes towardsreducing the principle can be relatively small, e.g., 10% of thepayment. So it makes sense that if the borrower can make the payments alittle more frequent than once a month or include more than the basicmonthly payment, the principle will be reduced faster and the interestearned will be correspondingly reduced. For example, biweekly paymentsof half the monthly mortgage amount will result in 26-biweekly paymentsbeing made in a year. So paying biweekly results in one extra wholemonth's payment being accumulated each year. That alone could reduce theterm of a 30-year mortgage by a couple of years and several thousanddollars being saved over the standard monthly payment schedule.

Commerce has always depended on the flow of value, i.e., companies andindividuals paying what they owe and collecting what they've earned. Theconduit for the flow of value is the payments system which hasprogressed from barter, to coins, to paper currencies, to checks, andlately to electronic payments. In decades past, cash and checks were thepreferred payment calculators for consumers and businesses. Today,businesses, government agencies, and consumers feel the burden of paperoverload as more than sixty-three billion checks are processed everyyear. Each check must be written or printed, signed and mailed, and thenretrieved, reconciled, and stored. With increasing incidents of checkfraud and a strong emphasis on privacy, traditional check-issuers aredemanding more secure and confidential alternatives provided byelectronic payments.

Direct deposit is the automatic deposit of all or part of employees'pay, retirees' pension and annuities, and other business deposits toconsumers' checking and/or savings accounts. Instead of printing checks,the employer or benefactor (originator) supplies a computer filecontaining a record for each participating employee/retiree/consumer tothe businesses financial institution (the ODFI). The ODFI assurescorrect formatting and transmits the file to the automatic clearinghouse (ACH) operator for delivery to the employees'/retirees'/consumers'(receivers') depository accounts at their financial institutions(RDFI's).

In the case of direct deposit of payroll, the employer provides theemployee on payday information regarding gross pay, payroll deductions,tax withholding, net pay, and other appropriate details. Similarly,businesses supply other appropriate data to pensioners, annuitants, andconsumers regarding the credits to their depository accounts. Directpayment and home banking/bill payment services save consumers time andmoney by eliminating checks, check handling, and postage. With directpayment, consumers preauthorize electronic debits to their depositoryaccounts for types of recurring bill payments such as insurancepremiums, utility bills, all types of loan payments, mortgages, clubmemberships, subscriptions, and charitable contributions. To initiatedirect payment, consumers must provide a written authorization to theirparticipating billing companies, clubs, charities, etc. Authorizationsmay be cancelled at the discretion of the consumer according to theprocedures outlined in the authorization. Cancellation of direct paymenthas no effect on the consumers' financial obligation to the billingcompany. With appropriate authorization, the billing company originatesa computer file containing payment information. The company's financialinstitution transmits the debit through the ACH-network to theconsumer's depository account.

When consumers choose to participate in conventional home banking/billpayment services, they can initiate their bill payments by telephone,computer, or other calculators. The consumer's service providerinitiates ACH debits from the consumer's bank account and ACH credits tothe consumers billing account for the authorized payment. Homebanking/bill payment services are offered by various financialinstitutions and other private service providers throughout the UnitedStates.

Direct payment and home banking services provide benefits to bothcompanies and consumers. Companies reduce expenses associated with checkprocessing and improve cash flows by reducing delinquencies and latebilling procedures. Consumers reduce check and postage costs and savethe time of manually preparing and mailing checks. In addition,consumers can reduce late fees, forget about payment deadlines, and maketheir account reconciliation process simpler. Consumers never relinquishcontrol of their accounts. Direct payments and home banking/bill paymentservices may be terminated or modified at any time according toprocedures outlined in the authorization agreement.

Electronic commerce can incorporate all aspects of the ordering,inventory, and payments processes of businesses. Companies may useelectronic data interchange (EDI) to place orders; to update, control,and reorder inventories; to transmit billing statements; and to collector make payments. The ACH-network is an efficient electronic paymentalternative to checks and wire transfers to complement electroniccommerce. Electronic business payments may be ACH debits or ACH creditsdepending on the needs of and the agreements among trading partners. TheACH-network provides an electronic payments calculators for financialEDI, Internet payments, corporate trading partner exchanges, corporatecash management, and other business-to-business transactions such astransmission of insurance and healthcare information and payments.

Financial EDI is the electronic movement of payments and payment-relatedinformation in standard formats through the banking system. Businessesof all sizes; state, local, and federal government agencies, andfinancial institutions are incorporating financial EDI into theirpayments practices to minimize the flow of paper, to reduceadministrative costs, and to improve efficiencies. Businesses use theACH-network to pay or to collect from corporate trading partners. Thetransaction sets of the ACH-network provide varying levels of paymenttransfers from the simplest to the most complex, including invoicenumbers, discount, adjustment, and other remittance information.

In the 1990s, the Internet is becoming an increasingly important toolfor business-to-business communications. Companies use the Internet toplace orders, update inventories, and authorize payments. TheACH-network provides an efficient payments calculator to settletransactions initiated on the Internet.

Good corporate cash management techniques allow businesses to acceleratecash in-flows, manage account balances to reduce borrowing needs,improve earnings potential of operating capital, and precisely controlcash disbursements. The ACH-network allows companies to move moneybetween branches or offices quickly and reliably based on operatingneeds. Companies with geographically dispersed offices can use theACH-network to draw funds into centralized accounts fromwidely-scattered financial institutions. Similarly, funds can bedisbursed to remote operations as needed. The ACH-network is anefficient calculator to shift balances to and from centralizedconcentration accounts to effectively administer corporate operations.

SUMMARY OF THE INVENTION

The present invention includes a bill-paying system with a customerdeposit account that receives periodic payroll deposits of an individualor a couple (“Subscriber”). A bill-paying service enrolls the individualor couple for a fee, and is authorized to transfer money from thedeposit account to the accounts of various creditors. An originatingdepository financial institution, such as a bank, actually handles allthe transfers of money, and such transfers are preferably all doneelectronically. The automated clearing house (ACH) network supports suchelectronic money transfers. The various bills and debts of theindividual or couple come due at times that are asynchronous to theirincome structure. The bill-paying service is authorized to debit thedeposit account for more than the basic minimums due all the creditorseach month. Such excess is used to accelerate the repayment of variousloans and debts according to what particular application at that timewill have the greatest long-term beneficial effect.

Among the features of the preferred embodiment of the invention are:

1. Each subscriber may be associated with multiple transactionsinvolving the movement of money;

2. A single subscription transaction table is provided which containsall data for moving money;

3. A subscriber can have one physical loan with multiple recurringpayment records, i.e., there is a logical grouping of disbursements fora given instrument;

4. A trust finder function provides a join across multiple tables fortrust arrangement to map money movement; and

5. A campaign product is provided for managing money based upon producttype and destination of funds.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is functional block diagram of a loan servicing system;

FIG. 2 is a functional block diagram of a money management system;

FIG. 3 is a flowchart diagram of a service provider and sponsor lockboxprocess embodiment of the present invention;

FIG. 4 is a block diagram of a debt repayment system;

FIG. 5 is a block diagram of a debt repayment system according to theinvention;

FIG. 6 is a flowchart diagram of a create ACH-file process embodiment ofthe present invention;

FIG. 7 is a flowchart diagram of a second part of the create ACH-fileprocess of FIG. 6;

FIG. 8 is a flowchart diagram of a generate receipts/disbursementsprocess embodiment of the present invention;

FIG. 9 is a flowchart diagram of a second part of the generatereceipts/disbursements process of FIG. 8;

FIG. 10 is a flowchart diagram of a third part of the generatereceipts/disbursements process of FIG. 8; and

FIG. 11 is a flowchart diagram of a fourth part of the generatereceipts/disbursements process of FIG. 8.

DETAILED DESCRIPTION OF THE INVENTION

FIG. 1 represents a loan servicing system, and is referred to herein bythe general reference numeral 100. A customer checking account 102sources a transfer of funds 103 to a bank 104. A credit 105 is made to acustody account 106 that acts like a buffer. Money is stockpiled in thecustody account 106 from the customer checking account 102 in amountsand times that are dependent on a customers ability to earn income. Ineffect, this is a front-end money-gathering subsystem. A series ofpartial payments are stored up over time.

A debit 107 is periodically made to issue a credit 108 to a paymentclearing account 110. An advise 111 is returned to a servicing platform112. So a back-end mortgage servicing or legacy subsystem is providedfor posting payments, segregating and remitting funds, calculatinginterest, mortgage servicing, car loan type processing, etc. In an earlydevelopment prototype system, the servicing platform 112 was provided byComputer Power, Inc., now a part of Alcatel. A communications link 113allows a service provider 114 to direct the back-end mortgage servicingor legacy subsystem. Another communications channel 115 allows theservice provider 114 to direct the front-end money-gathering subsystem.The servicing platform 112 was initially provided with mortgageservicing software, but it was discovered that this could be greatlyexpanded to service more than just the mortgages of a consumer. Many orall of the installment accounts could be simultaneously managed for manyhundreds of customers. It is also possible for billers to present billsfor the customer to pay that are delivered to the service provider 114,e.g., bills that require payment within ten days The custody account 106would then be used by the servicing platform 112 to pay such“pay-on-demand” bills when previously authorized.

FIG. 2 represents a money management system that is referred to hereinby the general reference numeral 200. A source designated depositaccount (DDA) 202 belongs to a subscriber 204 and has money periodicallydeposited to it. For example, DDA 202 may be the joint account of ahusband and wife where the husband gets paid by his employer everyFriday and the wife by her employer every other Tuesday. Between them,the couple (subscriber 204) have various installment loans and creditcard debts that need to be paid on or before certain days of the monthand with minimum payments for each. For example, a monthly payment isdue to a sponsor mortgage lender 206. An originating depositoryfinancial institution (ODFI) 208, e.g., a bank, is authorized atinstructed times and amounts to debit the DDA 202. The couple holdingthe DDA 202 have authorized a payment service provider 210 to instructthat funds be withdrawn from this account to pay the various creditorson time and with at least the required minimum payments. A pre-arrangedpayment and deposit (PPD) in ACH-format is used by the payment serviceprovider 210. The peculiar income structure of the subscriber 204 ispreferably used to advantage by the payment service provider 210 to makeperiodic payments on the installment loans and credit card debts. Forsuch service, the subscriber 204 will pay the payment service provider210 a fee, e.g., per use, per moth, etc.

The subscriber 204 can benefit by paying more than the minimums due oneach account and by paying a monthly installment account in part on aweekly or biweekly basis. They will benefit by a more rapid decrease inthe unpaid principle and therefore save on the interest charges thataccrue on that unpaid principle each month. At the same time, it isimperative that there always be enough money on hand to pay each bill byits due date. So any acceleration of payments cannot leave the system200 short of finds to pay any bill that normally comes due later in themonth. The payment service provider 210 must therefore be instructedwhich creditors are to be paid, the terms of the loans involved, theincome structure of the subscriber 204, and the total amounts authorizedto be withdrawn at various times of the week, month, and year from DDA202.

The movement of money in system 200 preferably uses the automatedclearing house (ACH) network in the United States which is a centralclearing facility that provides distribution and settlement ofelectronic financial transactions. ACH operators clear debits andcredits electronically, rather than through the physical movement ofchecks. There are four ACH operators in the United States, the FederalReserve System, Visanet ACH, new York ACH, and American ACH. The FederalReserve System alone clears about eighty percent of all ACHtransactions. Such ACH-network was formed in the early 1970's to providean efficient alternative using electronic and telecommunicationstechnology to replace paper check processing. The ACH system usesbatch-processing, store and forward operations. ACH payments are notprocessed individually. Originating depository financial institutions(ODFI's) submit ACH payment files to the ACH operators. The ACHoperators accumulate these files, sort them by destination, and transmitthem to receiving depository financial institutions (RDFI's) forapplication to customers' accounts at predetermined times throughout thebusiness day. The ACH system provides significant economies of scalecompared to individual wire transfers, and is faster and more accuratethan paper-check processing.

The ACH-network is a nationwide wholesale electronic payment andcollection system now used by hundreds of thousands businesses andfinancial institutions.

Technological advances implemented by the ACH operators allowtransactions to arrive at their destinations in a matter of hours.Entries are settled quickly, most often within one business day oforigination. The ACH-network delivers electronic payments quickly,safely, reliably, and conveniently to financial institutions for theircustomers.

The ACH-network is not used only for consumer transactions such asdirect deposit and direct payment, nor only for business-to-businesstransactions known as financial EDI. The ACH-network is also thesettlement calculator for home-banking payments, credit card clearings,electronic benefit transfers (EBT), point-of-sale (POS) and Internetpurchases, electronic check transmissions, and even automated tellermachine (ATM) transactions. The ACH system provides the basicinfrastructure for a wide variety of electronic payment applications.

The national automated clearing house association (NACHA) is a nonprofitbanking trade association that promulgates the rules and operatingguidelines for electronic payments, such as direct deposit, directpayment (preauthorized debits), financial EDI, electronic benefitstransfers, third-party bill payments, electronic checks, and Internetpayments. NACHA represents thirty-five regional ACH associations whichhave a total of more than 13,000 financial institution members. NACHAprovides educational payments conferences, as well as marketingcollateral and technical publications. NACHA can be accessed through theInternet at www.nacha.org.

An “ACH originator” is a company or other business entity that createsentries for introduction into the ACH-network. For example, an employerproduces credit entries to pay employees who have authorized directdeposit. A utility or other billing company produces debit entries fromcustomers' financial institution accounts who have authorized directpayment for products and services. A business produces financial EDItransactions to pay or collect trading partner obligations. ACHreceivers are consumers, customers, employees, and other businesses whohave authorized electronic payments by direct deposit, direct payment,or financial EDI to be applied against their depository accounts. Anoriginating depository financial institution (ODFI) typically initiatesand warrants electronic payments through the ACH-network on behalf ofits customers. A receiving depository financial institution (RDFI)provides depository account services to consumers, employees, andbusinesses and accepts electronic payments to those accounts. TheACH-network transfers payments and related data through computer andhigh-speed communications technology, e.g., the Internet. ACH-networkservices can be divided into five broad categories, (1) direct depositservices, (2) direct payment and home banking services, (3) electroniccommerce, (4) electronic benefits transfers, and (5) electronicchecking.

Returning now to FIG. 2, the system 200 further includes a manualreceipt 212 that can be accepted in addition to or instead of electronictransfer funds from DDA 202. Either way, a settlement account 214 iscredited with the money. A services fee account 216 is credited by adebit to the settlement account 214 and transferred to an operatingaccount 218 belonging to the payment service provider 210. An enrollmentfee account 220 is used to receive up-front subscription fees that maybe required for use of the payment service system 200 from thesubscriber 204. A commission fees account 222 is used to receivemiscellaneous fees that may be earned from the sponsor 206, the ODFI208, or others. All such enrollment fees, service fees, and commissionscontribute to the operating account of the service provider.

A number of earmarked custodial accounts 224 are credited with moneydebited from the settlement account 214 in the name of the clientsponsor 206, e.g., at the request of the service provider 210 usingACH-format PPD. Such money is collected to pay an FNMA, GNMA, FHA, etc.,mortgage loan, car loan, credit card debt, or other. Thus system 200 isbased on an asynchronous debiting based on the subscriber's payrollcycles and crediting based on the due dates of various obligations.Prior art systems are simply driven to debit and credit solely on thedue dates of the obligations.

Funds are then periodically withdrawn from the custodial accounts 224,in one case, to a check disbursement settlement account 226 so that aseries of paper checks 228 can be issued. In another case, funds areperiodically withdrawn from the custodial accounts 224 to an EFTdisbursement settlement account 230. The service provider 210 instigatesboth these kinds of transfers with PPD instructions in ACH-format. Afterall the required payments are made, a curtailment can be calculated. Anysurplus funds in the custodial accounts 224 will trigger a collection ofunpaid service fees (USF). This results in a transfer of USF fromcustodial accounts 224 to the service fees account 216 by PPD inACH-format. A corporate trade exchange (CTX) ACH-format is used totransfer funds from the EFT disbursement settlement account 230 to asponsor payment clearing account 232. This is handled by an EDI processinitiated by the service provider 210. Such CTX transfer can include BPRand ADX segments, for example. Payments are then ultimately transferredto a sponsor servicing system 234 from the sponsor payment clearingaccount 232. A standard lockbox layout format is used that is triggeredby the receipt of the CTX transactions.

A typical transaction flow between the sponsor 206 and the serviceprovider 210 includes a solicitation tape from the sponsor, newadditions from the service provider, refresh records from the sponsor,account status changes from the service provider, and account statuschanges from the sponsor. Sponsor-generated transactions can alsoinclude investor sales/transfers, service releases,payoffs/paid-in-fulls, foreclosures, bankruptcies, payment changes, anddelinquent payment information. Conversely, service-provider generatedtransactions can also include updated first payment dates, suspendedaccounts, terminated accounts, custodial account balances, next and lastwithdrawal information, reactivated accounts, and letter-writer queuerecords.

FIG. 3 represents a service provider and sponsor lockbox process 300. Astep 302 begins with ACH file processing, e.g., by the Federal Reserve.This fills an ACH-file 304 in CTX format with addendums. A step 306represents a bank's ACH processing, e.g., PepPlus. “Dollars” are thentransferred to an account posting file 308 and contribute to a dailycash reconciliation report 310. A paper reconciliation status 312 isoutput. “Data” is transferred from the step 306 to an EDI file 314 fromthe CTX addenda. An in-house EDI conversion step 316, e.g., Sterling, isused to provide a control report 318 and a flat file 320. A flat-file tolockbox format conversion step 322 produces a lockbox file 324. Such istransmitted in a step 326 to a loan-data file 328. A serving system step330 produces a loan-master file 332 and a general ledger book entry file334. The daily cash reconciliation step 310 combines information fromboth the account posting file 308 and the general ledger file 334.

In general, embodiments of the present invention comprise a bill-payingsystem with a customer deposit account that receives periodic payrolldeposits of an individual or a couple. A bill-paying service enrolls theindividual or couple for a fee, and is authorized to transfer money fromthe deposit account to the accounts of various creditors. An originatingdepository financial institution, such as a bank, actually handles allthe transfers of money, and such transfers are preferably all doneelectronically. The ACH-network supports such electronic moneytransfers. The various bills and debts of the individual or couple comedue at times that are asynchronous to their income structure. Thebill-paying service is authorized to debit the deposit account for morethan the basic minimums due all the creditors each month. Such excess isused to accelerate the repayment of various loans and debts according towhat particular application at that time will have the greatestlong-term beneficial effect.

The ACH-network is based on a series of agreements-between the companyand its financial institutions, between trading partners, between theemployer and its employees/retirees, between the billing company and itscustomers, among financial institutions, and between the financialinstitution and its customers. The basis for these agreements is the ACHrules: a complete guide to the rules and regulations governing theACH-network. These rules and operating guidelines are developed andpromulgated by the national automated clearing house association(NACHA). Rules and conventions for specific applications such ascross-border payments, financial EDI, electronic benefits transfers(EBT), electronic check, and consumer-initiated bill payments aredeveloped by NACHA's councils: the cross-border council, the bankers EDIcouncil, the EBT council, the electronic check council, the bill paymentcouncil, and the Internet council.

In order to participate in electronic payments, businesses must enterinto agreements with the originating financial institutions of theirchoice and with the receivers of the transactions, e.g., employees,retirees, consumers, or other businesses. These agreements define therights and responsibilities of each party to the transaction. Theagreement between the business and the financial institution alsoestablishes the method and procedures by which the payments areprocessed and settled.

The authorization by the receiver generally includes provision of afinancial institution name and routing number and the appropriateaccount number for the transactions. According to a preapprovedschedule, the business submits computer files usually in the ACHstandard format to its ODFI for processing. ACH software for personalcomputers, local area networks, and mainframe computers is readilyavailable in the marketplace. Even the smallest companies can takeadvantage of the efficiencies of the ACH payments system. In addition,many service bureaus and financial institutions provide a variety ofconversion and computer services to assist businesses. Thisbook-electronic payments review and buyers' guide-contains listings andcontact for the providers of ACH products and services.

There are currently four ACH payment formats available to meet companyand business needs for timely disbursements and collections. These arecash concentration or disbursement (CCD), cash concentration ordisbursement plus addenda (CCD+), corporate trade exchange (CTX), andthe soon-to-be obsolete corporate trade payments (CTP). Addenda recordsallow the CCD+, CTP and CTX formats to both electronically transmitpayments and payment-related information in standard formats betweenfinancial institutions.

The CCD payment format is the only corporate format that is notaccompanied by addenda records. However, a reference number is placed inthe entry detail record so that the payment and remittance advice can bereconciled by the seller (receiver).

The CCD+ format is the same as the CCD format with the addition of oneaddenda record. Part of the addenda record contains a payment-relatedinformation field in which data segments as defined by ASCII x12 orNACHA-endorsed banking conventions are used. This addenda record allowsthe transmission of limited remittance information related to thepayment.

The CTX format allows a company or business to electronically transmitone payment to cover multiple invoices and associated remittanceinformation. The CTX format allows up to 9,999 addenda records. For CTXentries, the addenda are linked together with each succeeding addendarecord carrying the next 80 characters of the message. The completeASCII x12 820 or 835 transaction set is “enveloped” within the CTXaddenda records.

FIG. 4 is a block diagram of a debt repayment system. In such system asponsor 10 may have a plurality of marketing contracts 12 which areunder supervision of a trust arrangement 13. The trust arrangement isused to move money as set forth on FIG. 2 (200). In FIG. 4, a W is usedto represent the four legs of money movement shown in FIG. 2. Incontrast to the prior art arrangement, a key element of the invention isthat each leg of the W moves money independently of each other leg.Thus, the invention can route money along each leg of the W as desired.Unlike the prior art, the invention therefore provides the asynchronousmovement of money pursuant to a trust arrangement.

Continuing with the conversation of FIG. 4, a subscription 1 isestablished for a subscriber 15. The subscription may have one or morereceipt schedules 16. The subscription also includes one or moredisbursement schedules 20 and one or more account policies 20. Thedisbursement schedules and account policies bear a one to onerelationship. That is, an account policy may only have a singledisbursement schedule and a disbursement schedule may only be associatedwith a single account policy. The subscription may also include aplurality of subscription transactions 18 as established through queue17. Each subscription transaction may include a corresponding bankaccount transaction 19.

FIG. 5 is a block diagram of a debt repayment system according to theinvention. It should be noted at the outset that key architecturalimprovements are provided over the system shown on FIG. 4. Among thefeatures of the preferred embodiment of the invention are:

1. Each subscriber may be associated with multiple transactionsinvolving the movement of money;

2. A single subscription transaction table is provided which containsall data for moving money;

3. A subscriber can have one physical loan with multiple recurringpayment records, i.e., there is a logical grouping of disbursements fora given instrument;

4. A trust finder function provides a join across multiple tables fortrust arrangements to map money movements; and

5. A campaign product is provided for managing money based upon producttype and destination of funds.

The foregoing features of the invention provide flexibility to allowmovement of money independently along each leg of the money path, i.e.,the “W” of FIG. 2. However, unlike the prior art, the foregoingadvantages are provided by the invention. Limitations of the prior artreside in the fact that a customer has a single subscription with asingle balance to a single custody account. Thus in the prior art, onemoney movement pattern per customer. The invention, however, providesmultiple money movement patterns per customer. Thus, multiple productsmay be provided with different characteristics, i.e., some may payinterest while others may not pay interest. Thus, a single customer maybe provided with a mortgage acceleration product that does pay interestand a credit card restructure product that does not pay interest.

As shown on FIG. 5, a sponsor 10 may have many subscriptions 30. Eachsubscription can include a plurality of receipt schedules 31. Eachsubscription may also include a plurality of subscription transactions34. Additionally, with regard to a subscription 30 a plurality ofsubscribers 35 may be associated with a subscription. In contrast to theprior art, in which a subscription transactions includes a single bankaccount transaction, the invention provides a single subscriptiontransaction table which contains all data for moving money. Sucharrangement is efficient and reliable in that all information iscontained in one location in contrast to the many locations required bythe prior art.

As further mentioned above, a one-to-many subscriber arrangement isprovided by the invention. Thus, all money transactions for a subscriberare maintained in a single file.

The invention also provides a plurality of account policies 36 for asubscription, each of which may have a plurality of disbursementschedules 37. This aspect of the invention provides a logical groupingof disbursements for a given instrument which stores and organizes datamore efficiently.

The invention also provides a trust finder function 38 which, in thepreferred embodiment of the invention, includes tables for a sponsor 39,product 40, payee 41, and investor 42. The trust finder provides a joinacross the four tables which defines the trust arrangement in such a wayto map money movements. Thus, additional attributes may be provided todefine the money movement process. Such definition is crested by thejoin across the four tables.

The invention also provides a campaign product feature by which acampaign 33 may be offered to a plurality of subscriptions. Eachcampaign, in turn, may comprise a plurality of products 32. Thisarrangement allows the management of money based on product type wheremoney is being remitted. Thus, a product may be sold among multiplecampaigns.

FIG. 6 represents a create ACH-file process 400 that runs through thesubscription transaction records and the trust arrangement prenote queuerecords that require NACHA processing. Process 400 creates an ASCII fileof bank transaction instructions. An ASCII file is generated for eachODFI bank and appropriate sponsor combination included in the system.Upon successful creation of the each ASCII file, the status of theassociated subscription transaction or trust arrangement prenote queuechanges. The process displays a message box in a step 401 to ask if theuser wishes to create an ACH file. If the user chooses to cancel theprocess, the process is aborted. Otherwise, the process 400 creates atask record in a step 402. In a step 403, the process selects allsubscription transaction and trust arrangement prenote queue recordsthat require NACHA processing. It sorts the transactions by sponsorgrouping requirements, ODFI transit routing number, transaction date,queue type, ODFI account number, RCVG transit routing number, RCVGaccount number and NACHA transaction code. An end-of-file test 404checks to see if all the transactions have been processed. If so, a step405 updates the task record and logs any errors. A step 406 retrieves aNACHA File ID and the bank information. A step 407 sorts out each groupof transactions that have the same sponsor grouping requirement and ODFItransit routing number. A NACHA File header record is created in a step408. A test 409 checks to see if this is the end of a group or andend-of-file. If not, processing continues on to process 500 (FIG. 5)through a connector 410. A step 411 creates a NACHA file control record.A test 412 checks if the total number of records in an ASCII file isdivisible by ten. If not, a step 413 creates filler records to bring thecount of records up to a multiple of ten. A test 414 looks to see if anyerrors have occurred. If not, a step 415 updates an addenda count in aNACHA ASCII file 416. A step 417 closes the NACHA ASCII file 416 andthen commits the transaction updates The step 405 updates a task file418 and task-error file 419. An exit 420 ends the process.

FIG. 7 represents a process 500. A connector 501 continues fromconnector 410 (FIG. 4). In a step 502, for each group of transactionsthat have the same transaction date, the process creates a NACHA batchheader record. A test 504 checks to see if this is the end of a group.In a step 505, for each group of transactions that have the same ODFIaccount number a test 506 checks for the end of the group. If yes, astep 507 builds an offsetting record and returns to test 504. If test506 is no, then a group of transactions that have the same RCVG bankaccount, NACHA trans code and queue type are assembled. If this is theend of such a group, then a test 509 returns control back to test 506.Otherwise, a step 510 is used to determine the NACHA trans code. If theanswer in test 504 was yes, the a step 511 creates an offsetting entryrecord and batch control record. Control is returned through a connector512 back to process 400.

A test 513 checks to see if the transaction's queue type is “EFT DSB.”If so, a step 514 divides the set of transactions having the same RCVGtransit routing number, RCVG account number and NACHA transaction codeinto groups of five hundred transactions or less. A test 515 checks ifall such groups of five hundred or less transactions have beenprocessed. A step 516 and 517 creates a NACHA detail record in CTXformat. A test 518 checks if all the transactions in a group have beenprocessed. Each transaction included in the NACHA detail record is usedin a step 519 to create a set of NACHA CTX addenda records formatted bythe payee's EDI element records. If the answer in test 513 is no, then astep 520 creates a NACHA detail record in PPL format. A step 521 updatesthe status of each subscription transaction or trust arrangement prenotein a queue 522 to “cleared” or “pending”. (Pending status only appliesto prenote and receipt transactions.)

FIG. 8 represents a generate receipts/disbursements process 600 thatruns through active subscriptions, and generates subscriptiontransactions for each active receipt schedule or disbursement schedulethat is scheduled to cycle. A step 601 displays a message box to ask ifthe user wishes to generate receipts and disbursements. If the userinstead chooses to cancel the process, the process is aborted. A step602 creates a task record in a task file 603. Each active subscriptionthat is associated with either an active disbursement schedule or anactive receipt schedule that has a next cycle initiate date that is lessthan or equal to the current system date is fetched by a step 604 from asubscription file 605. The subscriptions are sorted by the trustarrangement. A test 606 looks for an end-of-record. If not, a step 607retrieves records associated with the subscription from a subscriberfile 608, a marketing contract file 609, an administrator file 610, anda trust arrangement file 611. A test 612 validates the recordsassociated with the subscription to see if there is an authorizedmarketing contract that it is active prior to or on the current systemtime. This is done by looking in an authorized marketing contract file613. A test 614 verifies that the particular bank account, or receiptaccount specified by the subscriber trust arrangement, is active. A test615 checks to see if the holding account specified by the subscribertrust arrangement is active and the bank account status is cleared. Abank-account-status file 616 and a bank-account file 617 are consulted.A test 618 checks to see if the service fee account specified by thesubscriber trust arrangement is active and the bank account status iscleared. A test 619 checks to see if the EFT disbursement accountspecified by the subscriber trust arrangement is active.

When all of the records associated with a subscription pass validation,e.g., tests 614, 615, 618, and 619, control passes to process 700through a connector 620. If the end-of-file is encountered in test 606,a step 621 updates the task file 603. Process 600 then ends at an exit622. If any of the records associated with a subscription failvalidation, e.g., tests 614, 615, 618, and 619, control passes to step623 that logs the error in a task-error file 624.

FIG. 9 represents a stage 2 process 700. A connector 701 receivescontrol from connector 620 in process 600. Each receipt schedule thatneeds processing passes through a step 702. A test 703 looks for anend-of-file marker in the file. If one is found, control passes througha connector 704 to a process 800. A test 705 sees if the schedules'associated bank account status 706, the subscriber account specified bythe receipt schedule, has passed the prenote process and the schedulealso has a receipt method code of EFT. A step 707 creates thetransaction records that are associated with the retrieval of thereceipt funds from the subscriber's account to the receipt account. Astep 708 creates the transaction records that are associated with themovement of the receipt base amount from the receipt account to theholding account. A step 709 creates the transaction records that areassociated with the movement of the receipt service fee amount from theholding account to the service fee account. A step 710 cycles thereceipt schedule. A step 711 logs an SX change record for each activedisbursement schedule associated with the subscription that has a payeerequiring notification. The log is maintained in a disbursement schedulefile 712. A step 713 updates the subscriptions current balance with thereceipt amount and changes the subscription transaction next number in asubscription file 714. A test 715 checks if the process is working onits first receipt schedule for this subscription. If yes, then a step716 allocates a curtailment to the subscriber disbursement schedules. Ifthe schedules associated bank account status (subscriber) has not passedthe prenote process, or the schedule does not have a receipt method codeof EFT, then the process skips the receipt schedule and processes thenext schedule.

FIG. 10 represents a process 800 that is entered through a connector 801from connector 704 in process 700. Each disbursement schedule that needsto be processed passes through a step 802. A test 803 looks for anend-of-file marker in the file. If one is found, control passes througha connector 804 to the process 600. Otherwise, a subroutine call 805 ismade to process 900. A return is made to a test 806 which looks to seeif the disbursement is delayed in process 900. If not, a test 807 checksif the payment transaction method is to be electronic funds transfer(EFT) or by check (CHK). If CHK, then a step 808 creates the transactionrecords that are associated with the movement of the disbursement amountfrom the holding account to the check disbursement account. A step 809creates the transaction records that are associated with the creation ofthe corresponding check. If the payment transaction method is byelectronic funds transfer, a step 810 creates the transaction recordsthat are related with the movement of the disbursement amount from theholding account to the EFT disbursement account. A step 811 creates thetransaction records that are associated with the payment of thedisbursement amount to the payee. A step 812 cycles the disbursementschedule. A step 813 produces a SX change record. A step 814 produces aseries of appropriate service events in a file 815. A step 816 updatesthe subscriber current balance, funds disbursed, and “next” numbers.Such updates are sent to a disbursement-schedule file 817 and asubscription file 818.

FIG. 11 represents a process 900 that is entered through a connector901. A test 902 checks to see if the payee is authorized according to apayee list in a file 903. If so, a test 904 checks to see if thescheduled funds are disbursed, will the subscriber available currentbalance remain above zero? (E.g., available currentbalance=SUBN.CURRENT_BALANCE_AMT−(SUBN.PENDING_RCPT+SUBN.HOLD_AMT)) Asubscription file 905 provides data for the calculation. If yes, a test906 looks to see if this is the last cycle the disbursement schedule isbeing processed. If yes, a test 907 checks if there any pendingtransactions. A pending-return file 908, a pending-refund file 909, anda parameter-detail file 910 provide data for test 907. If the answer totest 907 is no, a test 911 checks if the refund system is active. Ifnot, a step 912 estimates all unallocated interest and updates thesubscription file to include new interest and decreases the subscriberminimum allowable balance to zero.

Each unpaid service fee passes through a step 913. A test 914 looks foran end-of-file. If not the EOF, a test 915 sees if there are any unpaidservice fees associated with the subscription that have an amount thatis less than or equal to the disbursement schedule curtailment amountand the process determines that it can pay the fee. If unpaid servicefees can now be paid, a step 916 creates transaction records towithdrawn such service fees from the subscriber holding account. A step917 creates the transaction records that are associated with the depositof the service fee amount into the service fee account. A step 918 movesthe unpaid service fee record in a file 919 to the paid service feetable and changes the status to “paid” in a file 920. The service feeamount is removed from the subscriber current balance, pendingcurtailment amount, and pending use amount.

If the EOF is reached in test 914, a test 921 checks to see if thecurtailment can be disbursed. If so, a step 922 removes the service feeamount from the disbursement schedule's pending curtailment amount. In astep 923, if there are any unpaid service fees associated with thesubscription that have an amount that is less than or equal to thedisbursement schedule curtailment amount, and the process determinesthat the only thing stopping the payment of the unpaid service fee isthe pending receipts, the disbursement is delayed until the next cycle.A step 924 logs any errors in a file 925.

Embodiments of the present invention further include an allocatecurtailment program, a calculate-next-cycle dates program, acreate-transaction program, an estimate-interest program, aget-schedule-status program, and a log-SX-change program. Anext-cycle-dates calculation tests to see if the disbursement scheduleis being delayed one business day. If so, thedisbursement_schedule.next_ini-tiate_date is incremented by one businessday and is verified by a calendar table. Thedisbursement_schedule.next_transaction_date is incremented by onebusiness day. And if the disbursement_schedule.next-id-eal_date is olderthan five days, the process logs an error into a task-error table.Otherwise the process cycles the receipt or disbursement scheduleaccording to the schedule's cycle type.

For the last cycle calculation, if all of the disbursement schedulesassociated with the subscription are closed except for the disbursementschedule that is currently being processed, and the disbursementschedule that is currently being processed will not cycle again prior toits end date, the projected disbursement schedule's next initiate date,then the subscription is on its last cycle.

For the fee payment calculation, if the unpaid service fee amount isless than or equal to the disbursement schedule's pending curtailmentamount, the unpaid service fee can be paid if the payment of the unpaidservice fee would not decrease the subscriber current balance below thesubscriber minimum balance allowed, while also subtracting thesubscriber pending receipt amount. Or if the payment of the unpaidservice fee would not decrease the subscriber current balance below thesubscriber minimum balance allowed, but requires the use of thesubscriber pending receipt amount, the unpaid service fee can be paid,if the disbursement schedule was delayed until the pending receiptamount cleared. Otherwise, the unpaid service fee cannot be paid.

For the curtailment payment calculation, if the disbursement schedule iscapable of curtailing money and its curtailment amount is greater thanits minimum, the curtailment amount can be included in the disbursementif the payment of the curtailment amount does not decrease thesubscriber current balance below the subscriber minimum balance allowed,while also subtracting the subscriber pending receipt amount. Or if thepayment of the curtailment amount does not decrease the subscribercurrent balance below the subscriber minimum balance allowed, butrequires the use of the subscriber pending receipt amount, thecurtailment amount could be included in the disbursement, if thedisbursement schedule was delayed until the pending receipt amountcleared. Otherwise, the curtailment amount cannot be disbursed.

For the create service event, if the sponsor associated with thesubscription requires the creation of an initial enrollment serviceevent at the time of the first disbursement and the current disbursementschedule is the subscriber primary disbursement schedule and it is onits first cycle, and if the subscription has enrollment fees that areunpaid, the process produces an “enpart” service event. Otherwise, theprocess produces an “enfull” service event. If the subscriber primarydisbursement schedule is being processed, the process creates a“dsbfamt” service event. Otherwise, the process creates a “dsbsamt”service event. If an enrollment service fee was paid during theprocessing of the current disbursement schedule, the process creates an“endfrd” service event.

An allocate-curtailment program assigns portions of a specifiedsubscriber calculated future minimum balance to each of the associateddisbursement schedules that are active and have been configured toreceive curtailment. The calculate next-cycle-dates calculates cycledates given the transaction type, cycle type code, clearing delay, lastideal date and special parameters for semi-monthly loans. Thecreate-transaction program creates the necessary transactions forsubscription activity, including subscription transactions, subscriptionbank account business month and bank account business month records. Theestimate interest program estimates interest that has not been allocatedin the past for a specified subscription. The process stores theestimated amounts in the appropriate subscriber bank account bus month(“sbabm”) tables and loans the total estimated interest amount to thesubscription from the service fee account. Thesubscriber-valid-business—months are all months that fall between thesubscriber start date and the subscriber closed date, or the currentdate, whichever is earliest. The get schedule status program is used todetermine the status of a single receipt or disbursement schedule. Theprogram returns “active”, inactive”, “post active” or “suspend” as thecurrent status, based on the values of the request, start date, enddate, next cycle ideal date and suspend days. The log SX change createsan SX record for a specified disbursement schedule if the payee requiresnotification.

Although the invention is described herein with reference to thepreferred embodiment, one skilled in the art will readily appreciatethat other applications may be substituted for those set forth hereinwithout departing from the spirit and scope of the present invention.Accordingly, the invention should only be limited by the claims includedbelow.

1. A bill-paying service method, comprising: enrolling a subscriber whois a debtor to a creditor and who has authorized debits to be taken froma designated deposit account (DDA) that is periodically credited with apayroll income on a first regular schedule; periodically debiting saidDDA through a transmission of an ACH-file to an originating depositoryfinancial institution (ODFI) and using any funds obtained to credit acustody account; charging a service fee to said subscriber by debitingsaid custody account; and paying said creditor on behalf of said debtorin an amount calculated for an accelerated repayment of a debt.
 2. Thebill-paying service method of claim 1, further comprising the steps of:collecting an enrollment fee from said debtor for an on-going servicethat includes the step of paying said creditor.
 3. The bill-payingservice method of claim 1, wherein: the step of periodically debitingsaid DDA coincides with said first regular schedule; and the step ofpaying said creditor coincides with a second regular schedule thatdiffers from said first regular schedule, and such a difference in saidfirst and second regular schedules provides for said acceleratedrepayment.
 4. The bill-paying service method of claim 1, wherein: thestep of periodically debiting, the step of charging a service fee, andthe step of paying said creditor each are implemented by a series oftransmissions of ACH-files to an originating depository financialinstitution (ODFI) that has access to said DDA, service fee account, andcustody account, and that can forward funds to said creditor.
 5. Thebill-paying service method of claim 1, further comprising periodicallycrediting the DDA with a second credit on a second regular creditschedule.
 6. The bill-paying service method of claim 5, wherein at leastone of said first and second credits comprises a direct deposit of adebtor paycheck.
 7. The bill-paying service method of claim 1, furthercomprising determining a second amount and a date that funds from thecustody account are to be transferred to a second creditor's creditoraccount to pay a second debt owed to the second creditor by the debtor.8. The bill-paying service method of claim 1, wherein the debt comprisesan interest-bearing debt.
 9. The bill-paying service method of claim 1,further comprising: reporting to the debtor a transfer of funds from thecustody account to the creditor account; and reporting to the debtor anadjusted credit term.
 10. The bill-paying service method of claim 1,wherein the transferring of the funds between the DDA, the custodyaccount, and the creditor account is performed using the ODFI.
 11. Thebill-paying service method of claim 1, further comprising offering thedebtor a campaign product.
 12. The bill-paying service method of claim1, further comprising transferring funds from the custody account to thecreditor account according to a second funds transfer schedule thatdiffers from the first funds transfer schedule, wherein the differencein the first and second funds transfer schedule provides for theaccelerated re-payment of the debt owed to the creditor by the debtor.13. The bill-paying service method of claim 1, further comprising:receiving, at the DDA, credits over time that are in excess of aparticular debt owed by the debtor to the creditor; providing for acomputation of the accelerated re-payment; and transferring an excesspayment to the creditor account that provides a reduction in a totalfinance charge earned by the creditor and charged to the debtor.
 14. Acomputer implemented bill-paying service method comprising: enrolling,at a computer system, a subscriber who is a debtor to a creditor and whohas authorized debits to be taken from a designated deposit account(DDA) that is periodically credited with a payroll income on a firstregular schedule; periodically debiting, by the computer system, saidDDA through a transmission of an ACH-file to an originating depositoryfinancial institution (ODFI) and using any funds obtained to credit acustody account; charging, by a debt repayment computing system, aservice fee to said subscriber by debiting said custody account; andpaying, by the debt repayment computing system, said creditor on behalfof said debtor in an amount calculated for an accelerated repayment of adebt.
 15. A machine-readable medium for providing a bill-paying servicewhich, when executed by a machine, causes the machine to: enroll asubscriber who is a debtor to a creditor and who has authorized debitsto be taken from a designated deposit account (DDA) that is periodicallycredited with a payroll income on a first regular schedule; periodicallydebit said DDA through a transmission of an ACH-file to an originatingdepository financial institution (ODFI) and using any funds obtained tocredit a custody account; charge a service fee to said subscriber bydebiting said custody account; and pay said creditor on behalf of saiddebtor in an amount calculated for an accelerated repayment of a debt.16. The machine-readable medium of claim 15, which when further executedby a machine causes the machine to collect an enrollment fee from saiddebtor for an on-going service that includes the step of paying saidcreditor.
 17. The machine-readable medium of claim 15, wherein: theoperation of periodically debiting said DDA coincides with said firstregular schedule; and the operation of paying said creditor coincideswith a second regular schedule that differs from said first regularschedule, and such a difference in said first and second regularschedules provides for said accelerated repayment.
 18. Themachine-readable medium of claim 15, wherein: the operation ofperiodically debiting, the step of charging a service fee, and the stepof paying said creditor each are implemented by a series oftransmissions of ACH-files to an originating depository financialinstitution (ODFI) that has access to said DDA, service fee account, andcustody account, and that can forward funds to said creditor.
 19. Themachine-readable medium claim 15, which when further executed by amachine causes the machine to periodically credit the DDA with a secondcredit on a second regular credit schedule.
 20. The machine-readablemedium claim 19, wherein at least one of said first and second creditscomprises a direct deposit of a debtor paycheck.